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Officials change stance on gaming compact

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Las Vegas needs to catch up with new internet technology September 13, 2011 3:00 AM by Mark Mayer

At the G2E convention a decade ago the word "Macau" was first uttered as the next big seismic event in the gaming world and it came to pass.

Now a new cutting edge remark from former Nevada State Sen. Randolph Townsend at a 90-minute I-Gaming Workshop featuring experts on Internet gaming that figures to be prophetic.

"We need to catch up with technology," Townsend told a gathering of Nevada media at UNLV’s William S. Boyd School of Law. "If we don’t get ahead of it, we will pay the price."

That price is Nevada, for the first time, falling behind Europe (Sweden in particular) in demand and Israel in technology.

"Technology is the wave of the future," said Townsend, current Nevada gaming commissioner. "Growth potential is unlimited and we need to accept the fact that the Internet and texting are how you get the message out to the 21-and-over crowd. Gaming is about entertainment, the nightclub experience and technology."

The subject at hand was the proposed legalization of I-gaming at the federal level and where the process currently stands in Washington.

"Until the feds say it is legal we will not act," Townsend said. "Marketing is not our concern. We know that technology grows the market. Remember, the Gaming Control Board issued you (casino operators) a privileged license. Never forget that.

"We have to make sure when a player walks in the door, that every time all the games are fair," he said. "The integrity of the game must be protected. It’s the same for I-gaming. If players win, they need to be paid."

Townsend also had high praise for Cantor and William Hill, who have taken the lead in gaming technology and expansion of betting opportunities.

"They have brought so much potential growth to the industry and have made it an exciting time for gaming in Nevada," Townsend told GamingToday in a one-on-one interview following his presentation at the workshop. I expect William Hill to be in full operation in a couple of months – definitely before the end of the year."

Townsend also supported the numbers Cantor has projected for handle, which have been questioned by some insiders as being inflated.

"It’s jealousy. There is no way those numbers are not accurate," Townsend said. "Cantor’s handle is everything they say it is. If it wasn’t, believe me, I would know about it. I am hands on about everything that goes on with regard to gaming. Their figures don’t lie. They’re high."

Townsend even gave out his cell phone number to all at the meeting. That’s not often done.

"We will be prepared when I-gaming is done," he said. "There will be no discretion (given) to nonpayment of taxes. Internet gaming can be worth billions to Nevada."

The approach to passage of a legal I-gaming bill would have to come through poker first. The message was made clear that the way to accomplish this was to separate poker from sports betting in any bill brought forward in Washington.

"The federal bill will be poker only, so you have to define the difference between a wager and a prize," said Dan Reaser, vice chairman of gaming and regulatory law at Lionel Sawyer & Collins. "And you must declare that poker is a game influenced by skill rather than a game of skill."

There are two proposed bills on the docket in Congress, but both have been in limbo. However, the panel was unanimous in saying progress was being made and legalizing poker on the Internet would eventually happen.

The questions, though, are how long and how much damage will they cause Nevada until it’s done?

"Now is the time to get legislation done," said Ellen Whittemore, former supervising deputy attorney general for Nevada’s Gaming Division. "Wynn, MGM, Stations, IGT want to sign deals."

Matt Policastro, head of the tax practice group for Lionel Sawyer & Collins said a change of position in 2012 is needed in the House of Representatives for I-gaming in poker to be legal.

"The rumor is that Sen. (Jon) Kyl is listening to our arguments," Policastro said. "The U.S. is in financial need."

The next step is for the Nevada Gaming Commission to meet a January 2012 deadline to adopt regulations for the enabling legislation.

In the meantime, the issue boils and we wait to be served.

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